NEW YORK – U.S. blue chips fell for a fourth day Wednesday and the Nasdaq slid more than 1 percent after a report showed manufacturing growth slowed to a near standstill, raising concerns the economy won't grow at a pace strong enough to support robust corporate profits.
The Dow Jones industrial average fell 50.91 points, or 0.42 percent, to end at 12,031.02. The Standard & Poor's 500 Index dropped 10.13 points, or 0.74 percent, to finish at 1,367.81. The Nasdaq Composite Index slid 32.36 points, or 1.37 percent, to close at 2,334.35.
Shares of manufacturers and technology companies, among the top performers in recent months and the most sensitive to a slowdown in the economy, led the decline. Conglomerate United Technologies Corp. and aluminum producer Alcoa Inc. (AA) were among the Dow's biggest decliners, while on Nasdaq, graphics chip maker Nvidia Corp. (NVDA) dragged.
The Institute for Supply Management said its index of national factory activity fell to 51.2 last month. A reading above 50 indicates growth.
"No wonder the tech sector took a hit today — the group is going to be one of the most impacted by a slowdown in the economy," said Tim Smalls, head of U.S. stock trading at brokerage firm Execution LLC in Greenwich, Connecticut.
The ISM data followed a weaker-than-expected survey on Midwest business activity, which was released Tuesday, and last Friday's lower-than-forecast growth in gross domestic product.
"Weak economic data has been piling up," said Peter Boockvar, an equity strategist at Miller Tabak & Co. in New York. "It doesn't bode well for earnings in the fourth quarter."
United Technologies dropped 2.2 percent, or $1.47, to $64.25, while Alcoa shares declined 1.5 percent, or 43 cents, to $28.33, both on the New York Stock Exchange.
On the Nasdaq, Nvidia lost 7.7 percent, or $2.69, to $32.18. The company said Wednesday it expects to restate previous financial statements to correct errors related to accounting for stock-based compensation expense.
Shares of Garmin Ltd. (GRMN) also ranked among the heaviest weights on the Nasdaq 100 after the maker of navigational devices said sales fell slightly below Wall Street's view.
Garmin's stock sank 15.8 percent, or $8.43, to $44.98 on the Nasdaq.
Bucking the downward trend was Ford Motor Co. (F), which climbed almost 3 percent, or 24 cents, to $8.52 on the NYSE after analysts noticed that the automaker is whittling down its inventories. Ford was among the stocks that helped curb the S&P 500's decline.
Caremark Rx Inc. (CMX) fell in mid-afternoon trading after the pharmacy benefits manager and drugstore chain CVS Corp. said they would merge. Earlier, Caremark shares rallied on a report that CVS would buy Caremark.
By the close, Caremark shares were down 2.2 percent, or $1.06, at $48.17, as the price paid was less than initially expected. CVS shares dropped 7.5 percent, or $2.35, to close at $29.03 on the NYSE.
Dual-listed Canadian stocks traded in the United States, such as BCE Inc. , fell, following the worst one-day point drop in Toronto's main stock index in about 2-1/2 years. The Canadian government announced plans to tax the once-booming income trust sector.
New York-traded shares of BCE, which owns Canada's largest telephone company, tumbled 12.2 percent, or $3.46, to $24.82.
Trading volume was heavy on the NYSE, where about 1.80 billion shares changed hands, above last year's daily average of 1.61 billion. On the Nasdaq, about 2.09 billion shares traded, above last year's daily average of 1.80 billion.
Decliners outpaced advancers on the Big Board by a ratio of about 2 to 1. On the Nasdaq, almost 3 stocks fell for each one that rose.